The next evolution of blockchain for food supply chain
As blockchain projects evolve beyond proof-of-concept trials to real-world applications, the industry is just beginning to scratch the surface of the technology’s potential.
Blockchain is gaining significant momentum, proving to be much more than just hype for the food and beverage industry. Last year, the number of new enterprise blockchain projects in the sector nearly tripled from the previous year, according to a report published by ESG Intelligence, India, as more brands are taking active steps toward building safer, more transparent supply chains.
Many of pilot programs have been put in place to enhance traceability and support food safety, recall mitigation and sustainability efforts.
As blockchain projects evolve beyond proof-of-concept trials to real-world applications, the industry is just beginning to scratch the surface of the technology’s potential. With blockchain-as-a-service (BaaS) models now available, companies of all sizes are exploring new ways to build trust between parties in their value chain and extend that trust to consumers—ultimately strengthening the food marketplace.
Enhancing the consumer shopping experience
Today’s consumers are more discerning than ever when it comes to their food and beverage purchasing decisions, demanding greater information about the products they consume. Is an item organic, all natural or non-GMO? Gluten-free or vegan? Locally or sustainably sourced?
Using blockchain, companies can make all product lifecycle information transparent to the end consumer, promoting their brands’ commitment to quality and building greater customer loyalty. This can be done through easy-to-access tools such as QR codes on product packaging or lot number searches on a company’s website.
An organic frozen packaged goods producer, for instance, could include a QR code on the box. A customer then scans the code with their smartphone and can instantly track that specific product—from raw ingredients all the way to the store shelf—to learn where and how the ingredients were grown, when they were picked, how they were processed and more.
Similarly, a customer with peanut allergies could look up the lineage of an ice cream carton labeled “nut free.” By simply entering the product’s lot number online, they could view all ingredients, confirm processing on a nut-free production line and verify the product is safe for consumption. Customers can then walk away with confidence in their purchases and trust in their chosen brand.
This interaction between consumers and information on blockchain can also drive additional kinds of engagement to improve the customer experience and focus marketing efforts. Brands and retailers can integrate blockchain with their existing loyalty programs to offer rewards points or discounts to customers whenever they interact with a product. So, the more the customer actively engages with lifecycle information on the blockchain, the more rewards they’ll receive.
Further, companies can use this data to better target customers with deals and promotions tailored to the types of products they’re interested in. Overall, this makes for an interactive, customized shopping experience for better customer satisfaction.
Taking a proactive approach to recalls
One of the most widely discussed applications for blockchain technology is recall mitigation. In the event of a product recall, companies can use historical data on the blockchain to determine the source of a problem and pull only the affected goods, rather than removing everything from store shelves.
Leveraging blockchain, companies may be able to do more than remove these products at the retail level. The technology could enable a proactive approach to informing customers about potential safety issues with items already purchased and stored in their refrigerator.
Using purchasing data gathered at the point of sale, retailers could proactively alert customers who recently bought an item affected by a recall. The consumer would then be able to remove the contaminated item before it is eaten, preemptively protecting them from any health issues.
This approach would not only bring immense value to the consumer, but also help brands drive home the message that they care about the health and safety of their customers.
Ensuring cold chain integrity
Blockchain also represents a major step forward for cold chain management, allowing companies to go above and beyond to validate the quality and safety of chilled and frozen foods across their journey to the end customer.
Distributed ledger technology can be integrated with Internet of Things (IoT) devices such as temperature and humidity monitors. Data gathered by these devices at each touchpoint in the supply chain are then permanently logged and shared on the blockchain. With this immutable documentation, brands can monitor their goods in real time—both in transit and in storage facilities—to pinpoint any potentially unsafe conditions.
An IoT sensor can monitor a refrigerated truck carrying a shipment, for example, and record any fluctuations in temperature throughout transport. This way, all parties in the network can guarantee the food is consistently kept at an optimal temperature. If the truck’s temperature rises out of the acceptable range, any damaged or spoiled products can be proactively pulled before they ever reach store shelves.
By publicizing this information, companies not only build trust among parties in their supply chain network, but also validate the integrity of their products for consumers.
Driving growth in the frozen food market
Today, there is a massive demand for healthy, yet convenient food choices. In fact, a study from the International Food Information Council Foundation, Washington, D.C., found that the percentage of consumers favoring “organic” and “natural” products has been climbing each year. This has opened up a major opportunity for the frozen food market, which has been growing for the first time in more than five years, as outlined in a report published by The American Frozen Food Institute (AFFI), Arlington, Va., and Food Marketing Institute (FMI), Arlington, Va.
Blockchain adoption will only add to this growth, helping the industry deliver on its promise of quality foods and instilling trust in their products. The more brands and retailers are open to leveraging distributed ledger technology for supply chain transparency, the more value they will demonstrate to the end customer. And in the end, confident consumers will be key to future market growth.